Disrupting The Logistics Industry: A Breakdown On Startup Driven Innovation

Disruptive innovation has reached a multitude of industries with the majority adapting fast to a changing environment. As the logistics industry is experiencing strong inflection points, such as high inefficiency – for example, a staggering 50% of transporters travel without cargo post-delivery – it is not surprising that this industry is being forced to innovate rapidly and develop solutions. The major component driving this innovation process is digital transformation, which accounts for €1.42 trillion in investments that are to be allocated to logistics by 2025.

At StartUs Insights, we conducted a detailed analysis of 40.000 startups and consequently discovered eight innovation areas that will alter the logistics industry as we know it today.

To shed light on the application and potential of the most disruptive of these technologies we decided to outline the eight most dominant innovation areas that influence the entire industry.

Automated Guided Vehicles (AGV)

This emerging technology holds enormous potential for logistics companies willing to innovate as it offers several areas of application, such as last-mile delivery, line-haul transportation, and warehousing operations.

Recognized as the ground equivalent to drones in last-mile delivery, AGVs have an even greater potential for disruption, as the regulatory system is more open towards them by comparison to drones. Within warehousing, AGVs massively contribute to a new paradigm of material handling – meeting full automation.

French startup Scallog operates in this innovation area to optimize order fulfillment. Utilizing automated guided vehicles to lift up to 600kg and carry storage shelves at a speed of one meter per second dramatically improves warehouse efficiency.

Automated Guided Vehicles (AGV)

Will this innovation area disrupt the industry?

Robotics & Automation

As robots are already able to manipulate objects in less structured environments, they support zero-defects logistics processes while also massively aiding performance and improving sensing capabilities, nearly substituting manual handling.

Fully automatic solutions capable of unloading containers or palletizing are developed, establishing new application areas, e.g. collaborative, pick & place and shelving robots among many others.

Germany-based Smart-Robotics sets a precedent by building collaborative robotic arms in different size variations that are suitable for a wide range of needs. Their ability to “mimic movements of human hands closely due to unrivaled flexibility provided by the six joints” makes these arms unique.

Robotics & Automation

Will this innovation area disrupt the industry?

Augmented Reality (AR) & Wearables

Ranging from smart clothing to bionic arms and smart contact lenses, wearables offer powerful support to the workforce.

Enabling smoother communication, a safer work environment, and better process execution, Augmented Reality systems predominantly consist of a wearable camera, smart-glass display, and battery pack which open new doors for the logistics industry, namely gamification, pick-by-vision, positioning and scanning.

oculavis is one example of a startup that produces smart glasses which empower workers to complete their tasks hands-free. This German startup utilizes AR to create new applications such as picking & placing orders by vision, scanning, interacting with support via Augmented Reality, and real-time tracking.

Augmented Reality (AR) & Wearables

Will this innovation area disrupt the industry?

Drones

Also known as unmanned aerial vehicles, drones disrupt the industry by offering a viable alternative to conventional express delivery. While not yet expected to replace ground delivery entirely, drones will have a significant impact on logistics processes.

In warehouses, they will be used for inventory management like the scanning of goods. Secondly, they are also very well equipped for certain material handling scenarios within the warehouse.

One award-winning startup operating at the frontiers of drone technology in the logistics industry is London-based Unmanned Life, a company that is currently building “the world’s first and only fully autonomous drone-based parcel sorting center”.

Drones

Last-Mile Delivery

Last-mile delivery has become vital to logistic companies with the rise of e-commerce that has reinforced the importance of customer preferences.

Making use of a flexible courier workforce along with the power of the crowd, last-mile delivery has gained significant importance for logistics companies, as it is a key differentiator in terms of customer satisfaction.

London-based startup Quiqup is at the forefront of providing businesses with affordable on-demand logistics. Their solution, Quiqees fleet, will shop, pick up and drop anything needed, offering transportation of a package by car, scooter, or bike, alongside providing real-time tracking for each delivery.

Last-Mile Delivery

Will this innovation area disrupt the industry?

Anticipatory Logistics

One of the lesser-known innovation areas is anticipatory logistics, implemented via software solutions that are able to predict demand before it occurs.

Stating that “24% of the road freight kilometers in Europe are driven by trucks which are completely empty”, Bulgarian-based startup Transmetrics is on a mission to end these inefficiencies by providing logistics companies with network optimization and demand forecasts by using predictive analytics and big data.

Anticipatory Logistics

Will this innovation area disrupt the industry?

Machine-Learning

The arrival of machine-learning, sometimes called self-learning, is bound to transform the logistics industry.

As this emerging technology needs very little human intervention and adapts algorithms according to the data received, thus becoming more efficient automatically, it offers great potential for process optimization and the automatization of decision making in logistics.

One example of the application of this technology is Sentenai, which facilitates the use of sensor networks to support real-time intelligence across logistics networks or in the cloud. The startup makes use of a company’s gathered data to increase the intelligence of their systems. Additionally, Sentenai’s stream learning system is able to adapt to changes as it “can relearn a stream’s structure whenever it changes, whether through the addition of new fields or the addition of new event types”.

Machine-Learning

Will this innovation area disrupt the industry?

Internet of Things (IoT)

As it holds many promises, the logistics industry is expected to take full advantage of IoT.

Smart objects will be capable of taking part in event-driven processes, while internet protocols will facilitate communication between sensor data and applications. IoT adds tremendous value across the entire supply chain including warehousing, last-mile delivery, and freight transportation.

CargoSense is just one case of an IoT startup which has the capacity to easily track valuable assets via their platform. The software taps into data provided by internet-connected sensors, thereby guaranteeing logistics companies full transparency as to what happens to a package until reception by the customer.

Internet of Things (IoT)

Will this innovation area disrupt the industry?

The eight outlined innovation areas are just a few of the crucial drivers in the logistics industry we recognized. Others include blockchain, logistics as a service, cloud logistics, digital identifiers, and 3D printing.

As these emerging technologies grow further and transform the industry, logistics companies are well counseled to rapidly identify the relevant innovation areas for their business and use the potential of evolving, disruptive and innovative startups to collaborate and achieve a lasting competitive advantage.

It is crucial to identify the relevant innovation areas for your business.